Companies use procurement systems to manage their purchases of supplies and equipment, helping them ensure they get the correct merchandise and appropriate quality for the best price, and allowing them to track their expenditures for accounting purposes.
An electronic procurement system, for example, that is manufactured by Ketera Technologies, Inc. of Santa Clara, Calif., the assignees of the present invention, may provide an electronic catalog of approved suppliers, together with negotiated prices and product descriptions. Typically, but not always, these approved suppliers will be subject to a pre-existing contract with the purchaser or the purchaser's agent to provide for certain levels of service and prices, as well as other terms normally embodied in standard purchase agreements.
A person using the electronic procurement system may review the catalogs and identify a product that they wish to purchase, entering a command to initiate the procurement process.
The procurement system captures data from the catalog giving the product description and price, and adds business specific information about the purchaser's location, department, and/or budget. This data is applied to a set of rules that define an approval path for the purchase, such rules considering, for example, the dollar amount of the purchase, the type of product, and the particular department.
Often the approval process will involve forwarding requests to particular persons in the organization to make the necessary approval. This may be done over a network by means of an e-mail, web page, or the like. Once the approval is given for the purchase, a purchase order may be automatically sent to the supplier and the originator of the purchase may be notified, again by e-mail or the like.
Sometimes a purchaser may need to purchase supplies “off-contract” or outside of the supplies listed in procurement system. This may be driven by out-of date prices in the procurement catalogs, or the unavailability of particular desired products. Such “maverick purchases” are not captured by the procurement system, and thus represent a loss of accountability for purchases by the company.
Nevertheless, it may be desirable or necessary to provide employees with a certain degree of flexibility to accommodate such purchases outside of the established vendors to provide purchasers with the greatest possible range of goods and services. Competition from off-contract vendors can provide a healthy, competitive pressure on the pricing of contract vendors.